talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort … incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more …, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and …

ex-post inefficient, it provides entrepreneurs with high-powered incentives ex ante. We show that two types of equilibria …

former are always effective in controlling risk-shifting incentives. …

-regulatory organizations have adequate incentives to implement regulation. We find that such incentives do exist when firms have sufficient …

promote ex post financial stability but also create perverse incentives for banks to engage in correlated asset choices ex …